BOP - FundamentalsofMultinationalFinance,3e(Moffett)...

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Fundamentals of Multinational Finance , 3e (Moffett)  Chapter 4    1
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The  Balance of  Payments 4.1 
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Mul 1) 
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The  balance of payments  as applied to a course in international finance may be defined as  A) 
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the amount still  owed by an exporting firm after making an initial down payment.  B) 
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the amount still  owed by governments to the International Monetary Fund.  C) 
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the  measurement of  all international economic transactions between the residents of a country and foreign residents.  D) 
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the amount of a  country's merchandise trade deficit or surplus.  Answer:  
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Topic: 
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BOP Introduction  Skill: 
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Conceptual 2) 
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Balance  of payment (BOP) data may be important for any of the following reasons:  A) 
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BOP data helps  to forecast a country's market potential, especially in the short run.  B) 
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The BOP is an  important indicator of a country's foreign exchange rate.  C) 
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Changes in a  country's BOP may signal a change in controls over payment of dividends and interest.  D) 
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All of the  above.  Answer:  
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Topic: 
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BOP Introduction  Skill: 
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Conceptual 3) 
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A country  experiencing a serious BOP ________ is more likely to ________ exports than otherwise.  A) 
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surplus;  contract  B) 
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deficit; contract  C) 
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deficit; expand  D) 
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none of the  above  Answer:  
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Topic: 
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BOP  Understanding  Skill: 
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Analytical 4) 
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Which of  the following would NOT be considered a typical BOP transaction?  A) 
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Toyota U.S.A.  is a U.S. distributor of automobiles manufactured in Japan by its parent company.  B) 
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The U.S.  subsidiary of European financial giant, Credit Suisse, pays dividends to its parent in Zurich.  C) 
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BOP - FundamentalsofMultinationalFinance,3e(Moffett)...

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